Fletcher in the News

Islamic Finance Sector is Much More Self-Confident After 2008 Crisis: Prof. Ibrahim Warde

A growing economy, an historically innovative banking sector and a large expatriate population looking for a trusted envoy to handle their money back home combined to make Bangladeshi banks amongst the fastest growing companies in the world.

Three banks in the country -- First Security Islami Bank, Social Islami Bank and Mercantile Bank -- all make the IBTimes 1000 list of the fastest-growing publicly traded companies in the world, with those financial concerns noting compound annual growth rates of 71, 43 and 26 percent, respectively, over three years.

The IBTimes 1000 is an annual compilation, proprietary to the International Business Times, of the fastest growing publicly traded companies based on their compound annual growth rate as calculated over three years.

A big reason for the rise: the surging interest in Islamic finance, as more people have begun to bank on a system that withstood the global financial crisis of 2008 more robustly than the conventional standard.

"There's much more self-confidence within the Islamic finance sector, because it's weathered the crisis better," said Ibrahim Warde, an adjunct professor of international business in the Fletcher School of International Affairs at Tufts University.

"Prior to that, the criticism for Islamic finance was 'Why re-invent the wheel? We have a perfectly good system out there.' That is clearly not heard anymore," Warde added

That self-confidence has resulted in impressive revenue growth for the banks, as an increase in the depositor base and the business opportunities that come with that has led all three banks to increase both their investment and fee income since 2008.